UK households' energy bills '£800 higher than they should be'

First Utility claims Big Six energy providers keep customers in the dark over cheaper tariffs.

gas hob — A number of energy providers have announced price hikes in recent weeks iStock

British households have spent a combined £7bn more than the should have on energy bills over the last three years, as energy companies kept their customers "in the dark".

Energy supplier First Utility, which is not among the "Big Six" providers, said households that remain on more expensive tariffs with Britain's largest energy companies have lost an average of £800 each over the period.

The provider said its calculations were based on information from switching site Energy Helpline and a report by the Competition and Markets Authority (CMA). First Utility then compared how much households on the standard variable tariffs would have spent in the period, compared to what they could have saved had they switched to a cheaper tariff.

However, few customers chose to switch plans, which highlighted how difficult it was for households to find out about cheaper tariffs.

"The Big Six have been exploiting customers' loyalty for too long and it has to end," said Ed Kamm, UK managing director of First Utility.

"The brutal truth, hidden away in the CMA report, proves that the Big Six have been relying on their standard variable tariff customers for years to bolster their profits.

"We have to see real change in 2017, with the onus on helping those who have been kept on bad deals for years and years."

Earlier this week, SSE became the latest of the "Big Six" providers to announce a price hike after last month nPower announced it will hike prices by nearly 10% from 16 March, with approximately half of its 1.4 million customers set to be affected.

SSE said its standard domestic electricity prices will increase by 6.9% from 29 April, while E.ON announced it would increase its dual fuel standard variable tariffs by 8.8% from next month.

Scottish Power said standard electricity prices will increase by an average of 10.8% and gas prices by 4.7% on 31 March, while EDF Energy's electricity prices rose by 8.4% last week, even though the company cut its gas prices by 5.2% in January.